Dealmakers

For all the debate about investment banking’s come-to-Jesus moment during the global financial crisis, the raw elements of dealmaking power remain the same. Good bankers provide advice that gives their clients a competitive advantage. At a time when boards are reluctant to put their reputations and balance sheets at risk, knowing your adviser will fight for every dollar and cent is critical. There are no easy wins and what’s needed is someone who is prepared to crack heads. This makes quality corporate relationships – already the main measure of a dealmaker’s power – more valuable than ever. While there are signs that confidence is returning to capital markets, it has been another quiet year for deals. Firms that embraced alternative lines of business – anything from purchasing non-performing loans to coming up with innovative structured transactions to advising a football code on broadcast rights – have done best. It has also paid to be close to governments on both sides of the Tasman. This list reflects the importance of government relations, and the importance of incumbency. The big three – UBS, Goldman and Macquarie – are still the investment banks to beat.

Its rivals have predicted the demise of UBS for years. But the Swiss bank remains powerful here despite its shortcomings in other parts of the world. Much of the credit goes to its CEO in Australia, one of the few bankers who can change the course of a deal through force of personality. Often affable, sometimes charming, Grounds is also as tough as they come. His manoeuvring on behalf of James Packer in the casino wars was a masterclass in brutal effectiveness. The question is how long he and his team led by Guy Fowler can keep it up. The gap between UBS and its next two rivals has closed. If that trend continues, UBS may lose its top dog position.

Macquarie does not like the notion its investment banking division has become a more client-focused, traditional outfit in recent years. But Bishop and his team won plaudits for securing more than their fair share of work in the last financial year, including advising on Sydney Airport’s restructure and State Grid’s energy assets acquisition. Invariably described as “smart" by clients – and even rivals – the head of Macquarie Capital in Australia is respected for his strategic thinking. His hard-nosed negotiating style makes him one of the most effective dealmakers in Australia.

While Goldman’s core M&A business is strong and its equity capital markets division is showing signs of improvement, its CEO has expanded the firm’s influence in other parts of the market. Under Rothery, Goldman has flexed its balance sheet with good effect, including through the purchase of Suncorp’s non-performing loans portfolio in June. Rothery’s political connections have also paid dividends. His position reflects a strong team, including Christian Johnston, one of the most trusted advisers in the local market.

At first glance, Wylie is an odd choice given he’s spending more time nowadays on other commitments such as chairing the Australian Sports Commission. But the Lazard boss, like Grounds, is one of the few bankers who can single-handedly change the course of a negotiation. Wylie has been accused of being too much of a lone wolf, but in a weak year for independent shops, the Lazard team has outperformed. Wylie probably wouldn’t be on this list were it not for the work of Andrew Leyden, in particular, in the energy and infrastructure sector.

Infrastructure is the gift that keeps on giving to dealmakers, so it helps to be one of the best bankers working in the sector. Easily the most low-key on the list, the Morgan Stanley investment banking head has won the trust of state governments as well as publicity-shy clients that are looking to either sell or buy multibillion-dollar, politically sensitive assets. It is not hard to see how Wagner’s phlegmatic style puts people at ease. He was a key player in the NSW government’s $5 billion sale of Port Botany – arguably the deal of the year.